Key Features of the CMMI Oncology Care Model (OCM)

By Ronald Barkley, MS, JD

Published: Monday, Jan 05, 2015

To date, enthusiasm for bundled pricing has been associated with the Medicare Bundled Payments for Care Improvement (BPCI) initiative, which has consisted principally of cardiac and orthopedic procedures with a hospital inpatient component. But what about modifying the payment methods for oncology/cancer care? Is oncology next in line for alternate/bundled payment?

It now appears that, in fact, oncology is next up. In August 2014, the Center for Medicare & Medicaid Innovation (CMMI) released its preliminary design description for the Oncology Care Model (OCM), which is expected to be formalized in the form of a major new CMMI initiative in alternate payment for chemotherapy services provided to Medicare fee-for-service beneficiaries. This CMMI initiative can be expected to be a “call to action” in the transformation from fee-for-service to alternate payment methodologies in oncology.

Is the definition of participant to be taken literally, that is, only private medical practices with a chemotherapy service can qualify for the OCM program? If so, what about the approximately 40% of community oncologists that are “practicing” in relationship to a hospital, or those that are employed by a hospital or by a hospital affiliated/captive medical group? Or those practicing in a contractual relationship with a hospital, such as professional services agreement (PSA), master services agreement (MSA), comanagement?

In preliminary discussion with representatives from CMMI, it has been clarified that CMMI did not intend to exclude physicians/practices other than traditional private medical practices and welcome OCM applications from other forms of practice (hospital employed or contracted). And further, practices that do not furnish chemotherapy directly on their own account would not be precluded. The threshold determinant is only that the Medicare FFS patient can be “attributed” to the tax ID/provider number of the physician/practice.

Will the PBPM payment be adequate?

The amount of the PBPM payment to an OCM participant is to be based on the OCM participant’s estimated practice costs to furnish the OCM enhanced services. So, it appears that the PBPM payment will not be consistent across all OCM participants, but will vary by the participant’s cost structure.

What might be the range of acceptable PBPM payment?

Two recent (summer 2014) program announcements may be instructive. First, WellPoint/Anthem announced its new “Cancer Care Quality Program” which pays a $350 PBPM amount for cancer care management and drug pathways compliance. CMS has proposed a new payment for Chronic Care Management of $41.92 per month effective in 2015. These two programs might establish a theoretical floor and ceiling for the range of OCM PBPM payment: $42 to $350, documented by the OCM participants actual costs.

Shared savings benchmarked to historic data

OCM proposes to establish benchmark expenditure targets for a participant based on the participant’s historic data. Benchmarking based on a look-back to a participant’s historic cost performance will will not benefit those participants who have already been active in care management process re-design, such as oncology medical home and oncology ACO practices. But benchmarking based on historic claims data does benefit higher cost programs – there is theoretically a higher benchmark amount on which to achieve savings.

In oncology, with the risk of the ever increasing costs of drug and new technologies, it would be preferable to benchmark against a regional or national norm for like services, not benchmark against oneself. There is some reference in the OCM that CMMI would “leverage regional or national data to increase precision for target prices for practices with a low number of episodes,” so perhaps there is some room for further deliberation of benchmarking based on market norms rather than benchmarking against oneself.